You've all seen those kids colouring books that have pictures that appear after you connect all the numbered dots in sequence. The market is like that when you trying to decide on the best course of action. Generally it is the big picture that tells you what to do in the individual stock and generally stocks follow the market flow.
However in the case of V this afternoon it was trading on its own story and rising strongly in a falling market. I am long it. The 13:55 candle on V is green making new highs, the 13:55 candle on the QQQQ shown here has just taken a big step down red.
So I am ready for the probabilities to assert themselves and prepare to exit this long, take profit and get short.
It worked out perfectly both directions as the post below shows.
The impetus for me to cover my shorts this afternoon was when I saw what was happening on the QQQQ. This screen capture shows the Qs cease their downward trend and a green candle shows up. Well, that is all the signal I need to cover the shorts or sell the inverse longs and bank the profits.
Connect the dots of the big picture and the direction of the small picture you are in becomes much more clear.
And another thing, turn off CNBC as it is just a concentration breaker all day long. You need to be able to recognize and act on what the market is showing you and not be distracted by the constant bombardment of bullshit.
4 comments:
thanks for the explanation. i would have saw that V trade around 145 and said its come too far too fast to enter. but you just go for it, because you are thinking that there are no limits. it could go to 90. i have to remind myself this, not to have limits.
i am glad i was at the screens during the "flash crash" so that i know, a stock like AAPL can go from 250 to 200. what is funny, even though i witnessed it, i still find it hard to believe it happened or will happen again. i need to remember anything is possible.
J dude, anything is possible. Not to be a pessimist but what if another 9/11 happens, real war breaks out in the middle east, N.Korea nukes Korea, Japan and China, so.cal has a 9.5 quake and the ipad buttons are found to contain lead?
Anything can happen.
When you trade under this premise, you are free from any upside or downside expectations or predictions. Anything can happen so it's never too late, too high or too low to trade something if the market says so.
Scott, I like your comment about connecting the dots on the big picture first. Case in point, this morning I noticed the oils were weak. I was short a few names(RIG, HAL, APA) and was green for a bit, I saw a break of lows at 8:05 in the OIH's, so I decided to see what played out. But I also noticed that the Q's and financials were relatively strong. In my head, I said either one of two things might happen. Either 1) The market would crack and my shorts would gain momentum to the downside or 2)A fake-out to the downside, and any short covering in the oils would pop the market higher in the short-term. So I decided to set an alert right above that breakdown bar to protect myself. Well, 5 min later, that alert was hit and red bar was negated. I however, didn't listen to myself to cover, kept my original stops in place and instead let the market do it for me a few minutes later, costing me extra money. For me it is another lesson that I have to learn to trust myself and my actions.
On another note, what is your opinion on listening to affirmations during the day while you trade? Have you ever done it? Just something I was interested in experimenting with and would like to hear your opinion. Thanks.
sean-for sure you can listen to affirmations as you trade. i do sometimes when i find the music a bit boring. the more you listen the more your subconscious believes it so the better the positive thoughts are ingrained in you.
Post a Comment